Sales of condos in Florida have dramatically fallen in recent weeks, even as prices dropped in some of its major metros and the number of "motivated" sellers in the state—those willing to accept a lower offer in order to sell quickly—is currently the highest in the country.
House prices at the state level have been steadily growing in the past months, with the median sale price for all homes in Florida being $404,100 in January, up 4.5 percent year-on-year.
While these numbers suggest that the price correction undergone by the U.S. between late summer 2022 and spring 2023 is definitely over in the Sunshine State, they don't explain why Florida is underperforming compared to the national market, with some of its major metros seeing a plunge in home sales and prices.
According to Redfin data, the number of sales in Jacksonville plunged by more than 27 percent in January compared to a year ago, while in Miami it dropped by nearly 9 percent. In Jacksonville, home prices have fallen 6.5 percent compared to a year ago, while in Miami they slid by 2.5 percent.
This is going against the trend at the national level, where condo prices are accelerating and sales are performing at a higher rate, according to Redfin. So, what's going on in Florida?
Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, explained the drop in condo sales as due in part to the ongoing insurance crisis in the state, and in part due to higher fees for condos.
"Long-term factors could be due to the sharp rises in property insurance premiums," Yun told. "And a second factor could be that many condominiums must have extra funds in reserve for repair and maintenance in the aftermath of the tower collapse a few years ago."
